We’ll pull the perspective back for a clearer look at price and prior breakout events:

Apple (AAPL) is an example of our concept of “Strong Stocks Getting Stronger.”

Not only has the trend been bullish (except for late 2012) but price has continued with a series of higher highs and lows.

The safest way to enter positions into a strongly trending stock is to buy shares on pullbacks or retracements.

“Flag” or retracement trades offer clear spots of entry and good places to locate a stop-loss in the event price fails to bounce higher, and instead breaks a support level (to trigger the stop-loss).

However, Breakout Trades trigger not when price “pulls back” but when it breaks out, either to new all-time highs or above a hand-drawn sideways resistance trendline.

We can see seven events where Apple shares broke short-term horizontal trendlines as it continued its uptrend.

Stops are often placed under the breakout trendline and the goal is to hold the position as long as possible, exiting when price breaks under a rising trendline or a stop that has been trailed under a rising moving average.

The plan is to enter a powerful impulse and profit from the short-term supply/demand (seller/buyer) imbalance.

Always monitor price closely and don’t be afraid to enter strong trends on breakouts – and never short a strong stock that is breaking out (that’s a great way to lose money quickly).